A simple guideline for splitting your monthly take-home income: 50% needs, 30% wants, 20% savings. Enter your income to see the suggested split, and compare it against what you're actually spending.
| Category | Suggested (50/30/20) | Your Actual | Difference |
|---|
Popularized by US Senator Elizabeth Warren's book on personal finance, the 50/30/20 rule is a simple starting framework, not a strict law: 50% of after-tax income toward needs (things you must pay to live and work — rent, groceries, EMIs, utilities), 30% toward wants (the discretionary, enjoyable stuff), and 20% toward savings and debt repayment beyond minimums.
In many Indian cities, this ratio needs adjusting — high rent cities push "needs" higher, while lower cost-of-living areas or higher earners might comfortably save well beyond 20%. Use the suggested split as a benchmark to compare against, not a target you must hit exactly.
It's a simple guideline for splitting your after-tax monthly income: 50% toward needs (rent, groceries, utilities, EMIs), 30% toward wants (dining out, entertainment, shopping), and 20% toward savings and investments.
Not always — in expensive cities like Mumbai or Bangalore, rent alone can exceed 30-40% of income for many people, pushing "needs" well past 50%. Treat this as a starting guideline to adjust from, not a rigid rule everyone can follow exactly.